Local Governments Win Solar at 9 Cents per Kilowatt-Hour With Collaborative Procurement

EPA’s McCarthy: “I cannot tell you how exciting it is to be at another landfill.”

Eric Wesoff May 15, 2015

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

"I cannot tell you how exciting it is to be at another landfill," said Administrator Gina McCarthy of the U.S. EPA while at this week's announcement of the nation's largest "multi-agency collaborative procurement for solar power."

That procession of bureaucratic terms is actually a lot more exciting (and difficult to accomplish) than it sounds.

Although government agencies have collaborated on the procurement of goods to leverage economies of scale in the past, that type of purchase process has never been applied to energy services, said Caroline Judy, acting director of the Alameda County GSA, the lead agency in R-REP (Regional Renewable Energy Procurement Project), a syndicate of governmental agencies across four counties and 19 agencies in the East Bay and Silicon Valley regions of the San Francisco Bay Area.

Led by Alameda County, with help from Joint Venture Silicon Valley and Optony, a solar consultancy, R-REP put together a bid package for renewable power that provides lower prices than the individual parties could have obtained.

Judy said, "We have pricing at utility scale," claiming PPA prices of 8 cents to 9 cents per kilowatt-hour on the aggregate projects, which is "15 percent to 47 percent below equivalent prior procurements."

There are 186 regional government facilities getting distributed PV installed on the ground, rooftops, and on parking structures for a total of 31 megawatts of solar power. The projects range from 15-kilowatt fire station rooftops, to 230-kilowatt carport installations at libraries and police stations, to a 6.6-megawatt project on the West Winton Landfill in Hayward, the largest project in the R-REP portfolio.

The now-capped landfill, with beautiful views of the San Francisco Bay, is located near the site of a rough-and-tumble town called Russell City that dates to the turn of the last century and had a rich blues history (Big Mama Thornton played there in 1961). The town ultimately gave way to industrial parks and landfills.

The Winton landfill solar project will be the first of its kind in the Bay Area, putting 24 acres of otherwise unproductive land to use. SunEdison will be doing the project development on the landfill, installing approximately 19,000 solar panels. Cupertino Electric and SolarCity are part of the installation team for other R-REP projects

It was at the landfill site that McCarthy said, "This project breaks through bureaucratic borders," agreeing that it was "harder than it looks."

Inspired by the potential of R-REP, McCarthy also announced the launch of a federal solar project, "the first federal partnership to purchase solar power across multiple agencies." The Forest Service, Department of Energy, and General Services Administration will be able to take advantage of economies of scale in solar installations at federal sites throughout Northern California and Nevada.

Bill Harrison, mayor of the city of Fremont, noted that the program provided the expertise on solar while streamlining the process and resulting in pricing about 20 percent lower than the city could have gotten had Fremont decided to go it alone.

The EPA's Gina McCarthy made her point: "This really isn't just another ground-breaking for a solar project. This really is a way of making solar part of the fabric of how we do business. This is about looking at renewables as the resource it deserves to be. This is about bringing jobs to the table that we care about. This is about saving money in our energy costs for the people that live in these communities so that we can have more teachers, firefighters and police officers."

Future site of the 6.6-megawatt Winton landfill solar project (via Google Maps)